Hodder v Australian Executor Trustees Ltd as administrator of the estate of Reece William Hodder [No 2] - [2021] WASC 415

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   HODDER -v- AUSTRALIAN EXECUTOR TRUSTEES LTD as administrator of the estate of REECE WILLIAM HODDER [No 2] [2021] WASC 415
CORAM:   HILL J
HEARD:   ON THE PAPERS
DELIVERED          :   25 NOVEMBER 2021
FILE NO/S:   CIV 2718 of 2015
BETWEEN:   ELAINE GEORGINA HODDER
Plaintiff

AND

AUSTRALIAN EXECUTOR TRUSTEES LTD as administrator of the estate of REECE WILLIAM HODDER
First Defendant

DAVID INDICH as beneficiary of the estate of REECE WILLIAM HODDER
Second Defendant

TANIA MARIE CORBETT as universal beneficiary under the will of REECE WILLIAM HODDER
Third Defendant

TAMMY LEE NARRIER as universal beneficiary under the will of REECE WILLIAM HODDER
Fourth Defendant

TAMARA ROSE INDICH as universal beneficiary under the will of REECE WILLIAM HODDER
Seventh Defendant

JASMINE INDICH as universal beneficiary under the will of REECE WILLIAM HODDER
Eighth Defendant

TYRELL AUGUSTINE HODDER as universal beneficiary under the will of REECE WILLIAM HODDER
Ninth Defendant

MARLEE ROSE RYDER as universal beneficiary under the will of REECE WILLIAM HODDER
Tenth Defendant

CORY DESMOND HODDER as universal beneficiary under the will of REECE WILLIAM HODDER
Eleventh Defendant

THE ESTATE OF THE LATE DAVID NARRIER as universal beneficiary under the will of REECE WILLIAM HODDER
Twelfth Defendant

Catchwords:

Practice and procedure - Costs - Whether indemnity costs should be ordered against plaintiff - Proposed offers of settlement of proceedings under Family Provision Act 1972 (WA) - Whether offers required to be between all defendants - Whether plaintiff unreasonably rejected offers

Legislation:

Family Provision Act 1972 (WA), s 14(6)

Rules of the Supreme Court 1971 (WA), O 24A

Result:

Application dismissed

The fourth and seventh defendants pay the plaintiff’s costs of the application

Category: B

Representation:

Counsel:

Plaintiff	:	No appearance
First Defendant	:	No appearance
Second Defendant	:	No appearance
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance
Seventh Defendant	:	No appearance
Eighth Defendant	:	No appearance
Ninth Defendant	:	No appearance
Tenth Defendant	:	No appearance
Eleventh Defendant	:	No appearance
Twelfth Defendant	:	No appearance

Solicitors:

Plaintiff	:	Corser & Corser
First Defendant	:	Gilbert + Tobin
Second Defendant	:	Friedman Lurie Singh & D'Angelo (Perth)
Third Defendant	:	HLB Lawyers
Fourth Defendant	:	George Papamihail Barristers & Solicitors
Seventh Defendant	:	George Papamihail Barristers & Solicitors
Eighth Defendant	:	In Person
Ninth Defendant	:	Eastwood Law
Tenth Defendant	:	Lawfield Legal Practice
Eleventh Defendant	:	Laird Lawyers
Twelfth Defendant	:	Roe Legal Services

Cases referred to in decision:

Australian Executor Trustees Limited v Hodder [2018] WASC 48
Daniels v Hall [No 2] [2014] WASC 272
Dobb v Hacket (1993) 10 WAR 532
Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1
Fortron Automotive Treatments Pty Ltd v Eurotime Holdings Pty Ltd [2001] WASCA 384
Hodder v Australian Executor Trustees Limited [2021] WASC 156
Hughes v St Barbara Ltd [2011] WASCA 234 (S)
Jones v Bradley (No 2) [2003] NSWCA 258
Maitland Hospital v Fisher [No 2] (1992) 27 NSWLR 721
Malliaros v Moralis [1992] 2 VR 501
Messiter v Hutchinson (1987) 10 NSWLR 525
Pro Property Pty Ltd v Orchard Holdings Pty Ltd [2013] WASCA 283
Rolls Royce Industrial Power (Pacific) Ltd v James Hardie & Co Pty Ltd [2001] NSWCA 461; (2001) 53 NSWLR 626
Schaechtele v Schaechtele [2008] WASC 148
Swansdale Pty Ltd v Whitecrest Pty Ltd [2010] WASCA 129 (S)

HILL J:

On 28 May 2021, I delivered my reasons for decision following the trial in this matter.[1] Orders were made for the adjustment of the distribution to the plaintiff from the intestate estate of the plaintiff's son, Mr Hodder, (Estate) from that which would otherwise apply under the Administration Act 1901 (WA). Costs were agreed between all parties save as between the plaintiff and the fourth and seventh defendants.
[1] Hodder v Australian Executor Trustees Limited [2021] WASC 156.
The fourth and seventh defendants seek orders for the plaintiff to pay their costs on an indemnity basis, alternatively on a party/party basis, from the date on which offers of compromise were made. The fourth and seventh defendants contend the plaintiff unreasonably rejected these offers to settle and should be required to pay their costs of the proceedings.
The plaintiff opposes the application primarily on the basis that it was not open to the plaintiff to settle with only some of the defendants on an application under the Family Provision Act1972 (WA) (Act). The plaintiff seeks orders for the application to be dismissed and for the fourth and seventh defendants to pay her costs of the application.
Each of the plaintiff and the fourth and seventh defendants filed affidavits of their solicitors in support of their positions. I have also had the benefit of written submissions filed by the parties.
For the reasons which follow, I consider the fourth and seventh defendants' application for costs ought be dismissed and they should pay the plaintiff's costs of the application to be assessed if not agreed.

Factual Background

Procedural history

This matter has a somewhat complicated procedural history. Relevantly, on 28 October 2015, the plaintiff commenced these proceedings by originating summons. Appearances were entered by the fourth and seventh defendants on 15 March 2016 and 25 February 2016 respectively.
On 20 June 2016, a mediation conference took place which was attended by the plaintiff, first, second, third, fourth, ninth, tenth, eleventh and twelfth defendants. At the mediation, the parties reached agreement as to the distribution of the Estate on the basis the plaintiff and the ninth to eleventh defendants would receive 67% of the Estate and the second to fourth and twelfth defendants would receive 33%. An agreement was subsequently signed by these parties' solicitors.[2]
[2] Affidavit of Shirley Feng filed 10 June 2021 [9], 'SF1'.
On 7 July 2016, the first defendant (AET) expressed concerns that the court had no jurisdiction to make orders to give effect to the mediated outcome, the only way to achieve this outcome was by a Deed of Family Arrangement signed by all persons entitled on intestacy, and this could not proceed until all relevant persons had been identified.[3]
[3] Affidavit of Shirley Feng filed 10 June 2021 [10], 'SF2'.
On 8 February 2018, on an application to the court to ascertain the beneficiaries entitled to participate in the distribution of the Estate, Justice Allanson made orders identifying the beneficiaries to the Estate as the parties to these proceedings, save for the fifth and sixth defendants.[4]
[4] Australian Executor Trustees Limited v Hodder [2018] WASC 48.
On 20 June 2018, a further mediation conference took place attended by the plaintiff, first, second, third, fourth, tenth, eleventh and twelfth defendants. The parties reached an agreement for the distribution of the Estate which was subsequently reflected in a draft Deed of Family Arrangement (DOFA).[5] The agreement between the parties was that the second to fourth, seventh and eighth defendants would receive $850,000 plus costs to be taxed from the Estate. This included payments of $200,000 plus taxed costs to each of the fourth and seventh defendants. An amended draft of the DOFA was circulated to the parties on 27 September 2018 which included a clause providing for an indemnity to be given by the parties in relation to Jasmine Indich (eighth defendant).[6] By email dated 10 January 2019, the solicitors for AET raised that the second defendant was no longer prepared to provide the indemnity proposed in the DOFA and while they wished to finalise the Estate as soon as possible, it could only give effect to an arrangement if it was agreed by all beneficiaries.[7]
[5] Affidavit of Shirley Feng filed 10 June 2021 [20] - [21], 'SF8' - 'SF10'.
[6] Affidavit of Shirley Feng filed 10 June 2021 [26] - [27], 'SF15', 'SF16'.
[7] Affidavit of Shirley Feng filed 10 June 2021 [30], 'SF19', 'SF20'.
On 27 February 2019, AET informed the parties that its view was that the DOFA was unlikely to be finalised without the eighth defendant's participation; the parties would need to re-negotiate their respective shares after deducting the eighth defendant's statutory entitlement from the Estate; the prospects of reaching that agreement were low (in light of the apparent inability of the parties to reach agreement on their respective cost entitlements); and it recommended the plaintiff re-list the proceedings for directions so it could be listed for final hearing.[8]
[8] Affidavit of Shirley Feng filed 10 June 2021 [32], 'SF22'.
Following this, correspondence continued between the parties to attempt to resolve these issues and finalise the DOFA, including correspondence to the eighth defendant to ascertain her position. On 21 May 2020, the plaintiff filed an entry for trial. The trial was listed before Justice Curthoys for 3 days commencing on 2 October 2020. Shortly prior to trial, orders were made vacating the trial for reasons which are not relevant to this application. Ultimately, the trial was re-listed before me on 30 November 2020 for 3 days.
On 28 May 2021, I upheld the plaintiff's application and made orders for the adjustment of the distribution of the Estate, substantially increasing the entitlement of the plaintiff to the sum of $2.1 million as well as the transfer to her of the Warwick property, reducing the entitlement of the second defendant to a fixed sum of $158,314.06, reducing the entitlement of the third defendant to 1/12^th of the residue of the Estate and removing any entitlement of the eighth defendant. The fourth and seventh defendants were each entitled to a distribution of 1/6^th of the residue of the Estate.
In monetary terms, this entitles the following parties to the following distributions from the Estate:[9]
(a)second defendant - $158,314.06;
(b)third defendant - $128,853.93;
(c)fourth defendant - $257,707.85;
(d)seventh defendant - $257,707.85.
[9] Further affidavit of Shirley Feng filed 25 June 2021, 'A'.
In total, these parties are entitled to a distribution of $802,583.69 from the Estate.
The parties agreed the plaintiff was entitled to payment of $80,000 for her costs out of the Estate. Otherwise, all defendants, apart from the first defendant (as executor) who was indemnified for its costs out of the Estate and the fourth and seventh defendants, agreed to bear their own costs of the action.

The offers of compromise

Each of the offers on which the fourth and seventh defendants rely were made after the correspondence from AET and between the parties referred to at [11] and [12].
On 9 April 2020, the fourth defendant made an offer of compromise to the plaintiff under O 24A of the Rules of the Supreme Court 1971 (WA) (Rules). The offer was that the fourth defendant be paid the sum of $190,000 from the Estate.[10] On 10 April 2020, an identical offer of compromise was made by the seventh defendant under O 24A of the Rules (First offers).[11] The plaintiff did not accept either offer. Instead, on 7 May 2020, the plaintiff's solicitors wrote to all defendants requesting that a global offer be made.[12]
[10] Affidavit of Paul Kenneth Hutchings filed 4 June 2021 [3], 'PKH-1'; Affidavit of Shirley Feng filed 10 June 2021 [44].
[11] Affidavit of Paul Kenneth Hutchings filed 4 June 2021 [4], 'PKH-2'; Affidavit of Shirley Feng filed 10 June 2021 [45].
[12] Affidavit of Paul Kenneth Hutchings filed 4 June 2021 [5], 'PKH-3'.
On 27 July 2020, the solicitors for the fourth and seventh defendants sent a without prejudice letter to the plaintiff's solicitors on behalf of the second, third, fourth, seventh and twelfth defendants, offering to settle with the plaintiff for a payment of $1,130,000 (inclusive of costs) to these defendants (Second offer).[13] The letter enclosed a draft Deed of Family Arrangement.[14] The letter stated that the first defendant was 'content' to implement the offer in the letter subject to it being satisfied with the terms of the settlement deed, particularly in relation to the mechanism to quarantine the statutory entitlement of the defendants who were not parties to the deed. The letter expressly stated that if the offer was not accepted within the time specified, costs would be sought on an indemnity basis from the plaintiff pursuant to O 24A of the Rules. The plaintiff rejected this offer.[15]
[13] Affidavit of Paul Kenneth Hutchings filed 4 June 2021 [6], 'PKH-4'.
[14] Affidavit of Paul Kenneth Hutchings filed 4 June 2021 [7], 'PKH-5'.
[15] Affidavit of Shirley Feng filed 10 June 2021, 'SF36'.
On 24 August 2020, the fourth and seventh defendants each sent a further letter of offer to the plaintiff's solicitors under O 24A of the Rules to settle the matter for the payment to each of them of $200,000, exclusive of costs (Third offers).[16] The offers were open for 28 days. The plaintiff rejected these offers.[17]
[16] Affidavit of Paul Kenneth Hutchings filed 4 June 2021 [8], 'PKH-6', 'PKH-7'.
[17] Affidavit of Shirley Feng filed 10 June 2021 [9] - [10], 'SF37', 'SF38'.
On 25 November 2020, the solicitors for the plaintiff made an offer of settlement to all defendants.[18] The following day, on 26 November 2020, the solicitors for the fourth and seventh defendants sent a letter of offer (counter-offer), marked without prejudice, to the plaintiff's solicitors on behalf of the second, third, fourth and seventh defendants. The letter sought an amount of $840,000 for these defendants (with $180,000 allocated to each of the fourth and seventh defendants), inclusive of costs (Fourth offer).[19] The offer was open until 2.00 pm on 27 November 2020. This counter-offer was not accepted by the plaintiff and the trial proceeded on the following Monday (30 November 2020).
[18] Affidavit of Shirley Feng filed 10 June 2021 [59], 'SF42'.
[19] Affidavit of Paul Kenneth Hutchings filed 4 June 2021 [11], 'PKH-10'.

Costs - general legal principles

Costs in proceedings under the Act

The starting point for the consideration of the application is that the court has a broad discretion with respect to costs in applications under the Act, as set out in s 14(6) of the Act. This section provides that 'The Court may make such order as to the costs of any proceeding under this Act as it deems just'.
The principles that govern the exercise of the discretion under the Act were summarised by EM Heenan J in Daniels v Hall [No 2] as follows:[20]
[20] Daniels v Hall [No 2] [2014] WASC 272 [10] - [43].
(a)the general rule, that a successful party to any action or matter should recover its costs, does not always apply to applications under the Act, although in appropriate cases it will apply;
(b)there are particular features of applications under the Act which effect the exercise of the discretion to award or withhold costs. This includes that the power of the court to make an award to an applicant does not depend on the enforcement of any pre-existing legal or equitable rights but on consideration of whether or not the deceased failed to make adequate provision for the proper maintenance and welfare of an applicant;
(c)beneficiaries who appear in the proceedings have an existing interest to protect and, subject to reasonable conduct on their behalf and avoidance of unnecessary duplication of representation and other expenses, are usually entitled to their costs of the proceedings on a party/party basis;
(d)an applicant who succeeds in obtaining an award for greater provision out of the estate is usually, but not always, entitled to their costs of the proceedings, such costs to be paid out of the estate as the court may direct. It does not always follow that a successful applicant's costs should be paid out of the estate generally because the court has power to direct whether or not those costs should be paid from a particular fund or at the expense of a particular disposition rather than from the general residue;
(e)the large variability and potential influence of the particular circumstances and the nature and size of the estate render it important that the general discretion over costs by the court should be carefully determined and exercised rather than merely following, without regard to the particular circumstances, general principles or practices;
(f)because of the difficulties in predicting any particular outcome in the course of proceedings under the Act, the mere failure to obtain a result more favourable than an offer which has been rejected will not necessarily deprive an applicant of their costs or result in an order for costs being made against that applicant. This is a relevant factor in the exercise of the general discretion to award costs, and if the rejection of the offer was, on an objective basis, unreasonable in the circumstances, it may lead to an order for costs being made against the applicant including on an indemnity basis;
(g)[9.2.2] of the Consolidated Practice Directions of the Supreme Court illustrates the matters that may be taken into consideration on the question of costs in applications under the Act, including principles of proportionality, whether the action has been conducted in an appropriate and efficient manner and whether there has been unreasonable conduct by any party.

Calderbank offers and offers under O 24A of the Rules

The purpose of a Calderbank offer is to promote settlement of disputes. The making of an informal Calderbank offer can properly impact the exercise of the court's discretion as to costs, even where a formal procedure is provided under the Rules.[21]
[21] Dobb v Hacket (1993) 10 WAR 532, 540 citing with approval Messiter v Hutchinson (1987) 10 NSWLR 525, 528.
As was stated by Murray J in Dobb v Hacket:[22]
The courts should preserve in the minds of litigants, the conscious consideration that their behaviour may place the matter at risk as to costs if they refuse reasonable offers of settlement. The court should be careful not to foster the proposition that obstinacy and unreasonableness will not be punished by orders as to costs.
[22] Dobb v Hacket, 540.
The purpose of O 24A r 10(5) of the Rules is to encourage a party to whom a fair and reasonable offer of compromise has been made to accept the offer and bring proceedings to an end. It states:
Where an offer is made by a defendant and not accepted by the plaintiff, and the plaintiff obtains judgment on the claim to which the offer relates not more favourable to him than the terms of the offer, then, unless the Court otherwise orders, the plaintiff shall be entitled to an order against the defendant for his costs in respect of the claim up to and including the day the offer was made, taxed on a party and party absis, and the defendant shall be entitled to an order against the plaintiff for his costs in respect of the claim thereafter, taxed on a party and party basis, except as provided in subrule (7A).
Subrule (7A) states:
If the Court is satisfied that the failure by the plaintiff to accept the offer made by the defendant was unreasonable, the defendant's costs are to be taxed on an indemnity basis, unless the interests of justice require otherwise.
This approach frees up the time and resources taken by proceedings which are prolonged unnecessarily and saves public and private costs, avoiding the inherent risks and delays of litigation.[23] This position was accepted by Malcom CJ in Fortron Automotive Treatments Pty Ltd v Eurotime Holdings Pty Ltd, who explained the question is not whether the offer was fair and reasonable, but whether, having regard to the full amount of the claim, the offer was one which, in all the circumstances, should in retrospect have been accepted.[24]
[23] Malliaros v Moralis [1992] 2 VR 501, 505; Maitland Hospital v Fisher [No 2] (1992) 27 NSWLR 721, 724.
[24] Fortron Automotive Treatments Pty Ltd v Eurotime Holdings Pty Ltd [2001] WASCA 384 [6], [8].

In Pro Property Pty Ltd v Orchard Holdings Pty Ltd, the Court of Appeal explained the interaction between costs and offers of settlement in the following terms:[25]
[A] circumstance in which the court may depart from the general rule as to costs is where the successful party has refused an offer of settlement which was at least as favourable as the judgment obtained by that party after trial. Where the unsuccessful party has been put to the costs of a trial at which the successful party did not achieve an outcome better than had previously been offered by the unsuccessful party, the dictates of fairness may require a different allocation of the liability for costs.
The Rules provide a specific regime in O 24A for offers of compromise to be made and for the ordinary (but not invariable) consequences in costs when such an offer is accepted, or alternatively where such an offer no less favourable than the judgment obtained after trial is refused. Such costs will ordinarily be on a party and party basis.
An offer of compromise under O 24A is not, however, the only form of offer than may have consequences as to costs. In exercising the discretion as to costs the court may have regard to offers of compromise in other forms, including Calderbank offers.
[25] Pro Property Pty Ltd v Orchard Holdings Pty Ltd [2013] WASCA 283 [46] - [48].
Whether a party's failure to accept an offer warrants the court departing from the general rule depends on all the circumstances.[26] In the exercise of the court's discretion, the overriding consideration must always be what is fair and just between the parties. The court will depart from the general rule if it was unreasonable in the circumstances for the offer not to be accepted. If the failure to accept the offer was unreasonable, the court will ordinarily make an order for costs in favour of the offeror from the date of the offer and allow the offeree costs only up to that date. The court will assess this not with the benefit of hindsight but will measure unreasonableness as at the time and in the circumstances in which the offer was made.[27]
[26] Pro Property Pty Ltd v Orchard Holdings Pty Ltd [48] citing Jones v Bradley (No 2) [2003] NSWCA 258.
[27] Pro Property Pty Ltd v Orchard Holdings Pty Ltd [49] - [50] citing Hughes v St Barbara Ltd [2011] WASCA 234 (S)[12]; Rolls Royce Industrial Power (Pacific) Ltd v James Hardie & Co Pty Ltd [2001] NSWCA 461; (2001) 53 NSWLR 626, 642.
The court will determine whether it was reasonable to accept the offer objectively, taking into account the following (non-exhaustive) factors:[28]
(a)the amount obtained by the offeree from the judgment;
(b)the stage of the proceedings at which the offer was received;
(c)the time allowed to the offeree to consider the offer;
(d)the extent of the compromise;
(e)the offeree's prospects of success, assessed as at the date of the offer;
(f)the clarity with which the terms of the offer were expressed.
[28] Pro Property Pty Ltd v Orchard Holdings Pty Ltd [50].
These factors are applicable both where costs are sought on an indemnity basis or party/party costs.[29]

Indemnity costs

[29] Pro Property Pty Ltd v Orchard Holdings Pty Ltd [51]; Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1 [17].

The general principles governing indemnity costs are well established and were summarised by the Court of Appeal in Swansdale Pty Ltd v Whitecrest Pty Ltd.[30]
[30] Swansdale Pty Ltd v Whitecrest Pty Ltd [2010] WASCA 129 (S) [10].
In considering whether to make an order for indemnity costs:
(a)the successful party does not need to show a collateral purpose or establish some species of fraud against the unsuccessful party; it is sufficient that a party persists in what should on proper consideration be seen to be a hopeless case;
(b)competing principles need to be balanced. On the one hand, a party should not be discouraged from pursuing an action where its success is not certain. However, if a party by its conduct has unnecessarily increased the cost of litigation, it is appropriate that this party bear that increased cost;
(c)an indemnity costs order may be appropriate in situations which are shown to involve some element of improper, or at least unreasonable, conduct by a party or the party's legal advisers;
(d)a properly crafted special costs order may remove the need for an indemnity costs order, where components of items are allowed above the applicable ceiling;
(e)an indemnity costs order may not be appropriate if the claim for costs would be likely to be recovered under the standard order for party and party costs, or under a special order raising or removing a scale ceiling allowance.

The parties' submissions

The fourth and seventh defendants sought orders for indemnity costs from the dates the offers were made on the basis the plaintiff unreasonably rejected the offers. In the alternative, the fourth and seventh defendants seek costs on a party/party basis from these same dates.
The fourth and seventh defendants submitted the plaintiff did not obtain judgment more favourable to her than the terms of the offers made by them and the plaintiff would have been better off as against those defendants had any of the offers been accepted.
Although two of the four offers (including the counter-offer) were made by the fourth and seventh defendants as part of a group, the fourth and seventh defendants submitted it was open to the plaintiff to accept any of the four offers. They contended it was not to the point that acceptance of any of the offers would not have fully resolved the plaintiff's claim. Acceptance of these offers would have obviated the need for the fourth and seventh defendants to participate in trial, reducing their own costs and the trial more generally.
The fourth and seventh defendants emphasised that because there is no 'liability' per se that defendants share in a family provision claim, it is not necessary for each and every defendant to be party to an offer of compromise under the Rules.
While accepting the innate difficulty in Family Provision Act matters of quantifying a claim with precision, they emphasised there is a substantial delta between the entitlement of each of the fourth and seventh defendants as sought in the plaintiff's application (being $33,696.47 as at 15 September 2020) compared to that allowed following trial (being approximately $270,000).
In this case, the fourth and seventh defendants submitted there is little difference between the operation of O 24A r 10(7A) of the Rules and the general principles as to indemnity costs; both turn on whether the plaintiff's non-acceptance of the offers were reasonable. In relation to this question, the fourth and seventh defendants drew attention to the following matters.
First, the plaintiff's misconception of the quantum the fourth and seventh defendants were likely to receive following judgment was of such a magnitude that the rejection of their offers was unreasonable. In particular, they submit the plaintiff did not consider the size of the Estate nor the personal circumstances of each of the fourth and seventh defendants in rejecting the offers.
Second, it can be inferred from the plaintiff's offer to the fourth and seventh defendants that quantum was an important factor in the plaintiff's rejection of their offers.
Third, notwithstanding the fact that other defendants in the 'group offers' did not obtain a more favourable outcome after judgment, the question of whether the plaintiff would have been better or worse off must be considered.
Fourth, the particular circumstances of the case, including the relationship between the plaintiff and second defendant and the remaining beneficiaries, meant that the plaintiff's rejection of the offers was unreasonable.
Fifth, the fourth and seventh defendants did not dispute the jurisdictional question under the Act was satisfied and the only question for determination was the further amount the plaintiff was entitled to.
Sixth, by rejecting the settlement offers, the fourth and seventh defendants had little choice but to participate in the trial. Otherwise, they were at risk of the court assuming they already had adequate resources.
The plaintiff contends the fourth and seventh defendants' application is fatally flawed as it was never open to the plaintiff to settle with some of the defendants to the exclusion of others. She says this was known and agreed by all defendants at the first mediation conference on 20 June 2016 and confirmed when AET refused to 'permit the parties to proceed with the agreement proposed' at that mediation.[31]
[31] Plaintiff's submissions [2] - [3].
With respect to the Second offer, the plaintiff contends this was not an offer that can be considered an O 24A offer or a Calderbank offer. This offer was subject to contingencies which the participating defendants to that offer relayed in a letter to the plaintiff.[32] In any event, the plaintiff relied on the fact that the defendants to that offer received less in total at trial than the amount sought in that offer.[33]
[32] Affidavit of Paul Hutchings filed 4 June 2021 [6], 'PKH-4', p 12.
[33] Plaintiff's submissions [7].
The plaintiff submitted acceptance of the fourth and seventh defendants' application would have the effect of enabling any plaintiff to settle with an individual defendant to the exclusion of others, in amounts of their own accord and potentially in excess of their entitlements under the Administration Act. This would deprive the court of the power to vary the provisions of the Administration Act and determine for itself how an estate is to be distributed.
In this case, following the plaintiff's inability to contact the eighth defendant, the plaintiff contends there were only two options open to her to resolve the proceedings: entry into an amended DOFA which maintained the eighth defendant's statutory entitlement or listing the proceedings for trial.[34] In these circumstances, she submits it was not unreasonable for her to reject the offers and seek the proceedings be listed for trial.
[34] Affidavit of Shirley Feng filed 10 June 2021 [33] - [35], 'SF24' - 'SF26'.
On this basis, the plaintiff disputes the fourth and seventh defendants are entitled to their costs and seeks her costs of having to respond to the application, to be assessed if not agreed.

Disposition

In this case, ultimately the plaintiff has been successful in the claim she brought. Orders were made significantly adjusting the entitlement she would otherwise have received under the Act. Most of this adjustment occurred through the reduction of the entitlements of the second defendant and the third defendant and the removal of any entitlement of the eighth defendant. Otherwise, the entitlements of the other defendants, including the fourth and seventh defendants, were broadly maintained.
In considering each of the offers made by the fourth and seventh defendants, I observe that each was an offer as to what these defendants would accept as a distribution from the Estate and not an offer as to what the plaintiff should receive as a distribution from the Estate. As such, in considering these offers, at face value, it is not possible to determine whether the plaintiff achieved an outcome better than that offered. This depended not only on what the plaintiff received but also what each of the other defendants received as a distribution from the Estate.
Putting this to one side, I turn to consider whether the plaintiff's failure to accept any of the offers was unreasonable. For the following reasons, I do not consider it was.
First, at the time each of the offers were rejected, the executor of the Estate, AET, had informed the parties on numerous occasions that the matter could not be resolved without either the agreement of the eighth defendant or the preservation of her entitlements. Neither of these was obtained or agreed by the remaining parties. To address the position of the eighth defendant, various matters were proposed including the provision of an indemnity to AET in relation to the eighth defendant.
Second, there was a reasonable basis for the plaintiff's belief that the position of the executor was correct. In Schaechtele v Schaechtele, Le Miere J considered the jurisdiction of the court to make orders giving effect to a settlement in proceedings concerning applications under the Act.[35] His Honour noted that where parties have agreed to settle proceedings under the Act, the court will usually make orders giving effect to the settlement as it is in the public interest that matters be resolved by mediation and agreement. However, the court only has jurisdiction to make an order under s 6(1) of the Act, if it considers the disposition of the deceased's estate is not such as to make adequate provision for the proper maintenance, support, education or advancement in life of the plaintiff. Where the court is satisfied that it has jurisdiction under the Act to make orders, the court must consider whether to exercise the discretion to order that further provision be made out of the estate.[36]
[35] Schaechtele v Schaechtele [2008] WASC 148.
[36] Schaechtele v Schaechtele [6] - [7].
Le Miere J stated that:[37]
This court cannot make an order giving effect to the proposed settlement unless the court thinks that such provision should be made out of the estate of the deceased for the proper maintenance or support of the plaintiff. But that does not mean that the court is in effect to hear the matter as if it was a contested application and then to give or to withhold orders to give effect to the settlement by comparing the settlement with the judgment which the court would have given. The court must give proper consideration to the evidence before it. The court should be aware of the risks of litigation in an area in which reasonable people can reasonably reach different conclusions and give proper weight to the fact that the parties wish to effect the settlement. If the court is satisfied that the settlement falls within the bounds of a reasonable exercise of discretion then the court should make orders to give effect to the settlement.
[37] Schaechtele v Schaechtele [18].
In deciding whether to exercise its discretion to make orders, one of the factors the court is required to take into account is the need and moral claims of other persons who have a legitimate claim on the estate.[38] If not all defendants or proposed beneficiaries have agreed to the settlement, this will need to be the subject of evidence.
[38] Hodder v Australian Executor Trustees Limited [24].
Third, both the Second offer and the Fourth offer were made on behalf of a number of defendants. These defendants collectively did not achieve a better result at trial than the amount of either offer.
Fourth, while I accept that in considering a costs application following the rejection of an offer it can be relevant to consider what offers were made on behalf of individual defendants, even when the offer is made on behalf of more than one defendant, this has significantly more limited weight in an application under the Act where the plaintiff does not have a cause of action against the defendants, let alone separate causes of action against the defendants.
Fifth, the First and Third offers were exclusive of costs. There is no evidence before the court to enable a determination of what the party/party costs of the fourth and seventh defendants were at that time, whether there was any expectation that the costs would be paid out of the Estate (which would have reduced the distribution to each of the parties) and the amount, if any, of any difference between these offers and what the fourth and seventh defendants received at trial.
Sixth, the Fourth offer was made only 2 business days prior to trial and was only open until 2.00 pm the following day. The making of an offer shortly prior to trial and allowing the plaintiff only a very limited time to consider the offer weighs against any non-acceptance of the offer being unreasonable.
Seventh, I do not accept the plaintiff's rejection of the offers was due to her misconception of the quantum the fourth and seventh defendants were likely to receive. While the originating process proposed a payment of only approximately $34,000, each of the 'agreements' entered into by the parties contemplated substantial payments being made to these defendants. In these circumstances, I consider the rejection of each of the offers is more consistent with a view that settlement could not occur without the consent of all defendants.
In these circumstances, I am not prepared to conclude the plaintiff acted unreasonably in rejecting the offers made to her by only some of the defendants to the proceedings. I accept that in this matter, the plaintiff reasonably believed that the only practical means by which settlement could be achieved was a joint offer by all defendants to the action, including the eighth defendant, alternatively an offer that maintained the statutory distribution of the eighth defendant. The offers that were made by the fourth and seventh defendants did not address this. In my view, there is force in the argument by the plaintiff that the offers made by the fourth and seventh defendants were not capable of being accepted by the plaintiff in a manner which would bring to an end the involvement of these parties in the proceedings.

Conclusion

For these reasons, I do not consider that special circumstances exist which would require the plaintiff, who has otherwise been successful in her application, to pay the costs of the fourth and seventh defendants, let alone on an indemnity basis.
In respect of this application, the plaintiff seeks an order that the fourth and seventh defendants pay her costs to be assessed if not agreed. In my view, this is the appropriate costs order and the 'general rule' should apply to this application. The fourth and seventh defendants have been unsuccessful in seeking their costs and costs should follow the event.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
ME
Associate to the Honourable Justice Hill
25 NOVEMBER 2021